Impacts of the CARES Act on Creditors’ Rights and Bankruptcy

On March 27, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) became law. The new law contains several temporary amendments to the Bankruptcy Code, some of which apply in the business bankruptcy context and some of which apply in the consumer bankruptcy context. All of the changes are effective only for one year from March 27. In addition, the CARES Act requires creditors to grant forbearances on federally-backed mortgage loans and imposes a 60-day moratorium on foreclosures related to such loans. These key provisions of the CARES Act impact lenders and are discussed herein.

The complete article, "Impacts of the CARES Act on Creditors’ Rights and Bankruptcy," was published by the Alabama Bankers Association in their May 2020 Newsletter, Board Briefs, Vol. 5, No. 2.